Making Sense of the University's Financial Situation

Thu Nov 9 04:58:23 MST 2023

Dear Faculty and Staff Colleagues,

In partnership with the leadership of the ALVSCE Staff Council, I’d like to share information regarding a presentation on November 2nd that President Robbins and CFO Lisa Rulney gave to the Arizona Board of Regents (ABOR).  I appreciate this opportunity and hope to provide what clarity I can about the financial situation facing the University.

The best way to combat misinformation is to go to the source.  You can view the entire November 2nd ABOR meeting<https://youtu.be/GFA4-MvDnJ8?si=AetqQMy5buPOxEXV&t=3643> at the following link.  It has been indexed to start at the beginning of CFO Rulney’s presentation.  This presentation is about 36-minutes in length but is worth watching to truth what you might have heard or hear in the future.  A story about this presentation was later reported in The Arizona Daily Star<https://tucson.com/news/local/education/college/u-of-a-cuts-budgets-considers-hiring-freeze-to-escape-financial-crisis/article_2218ca26-7cd6-11ee-ab84-37f8150e08de.html>.  And Faculty Senate hosted President Robbins on November 6th, which you can watch here<https://arizona.box.com/s/xypikopn45wdko3esv4r16bdiumw5y5s>.  He shares more detail and answers questions between 0:30:00 and 1:25:00.

Financial terminology is not the most accessible and the numbers and discussion with Regents is certainly disconcerting.  For instance, what is cash on hand and why is it important to the University?  Cash on hand is a measure of the number of days that the University could operate if no new revenues were received.  It is used by the Regents and external financial institutions to assess the financial health, liquidity, and risk of our financial condition.  The Regents prescribe an operating range between 140 to 234 days cash on hand.  As CFO Rulney reported, the University is forecast to fall to 97 days, and having too few days cash on hand hurts our ability to obtain funding to build or renovate facilities, pay for operations if there is a downturn in student enrollment or the economy, or invest in new opportunities that help the university grow.

These issues are in addition to the $10 million deficit (affecting CALES only) that I shared with you in my August 14th email to CALES employees.  We paused most of the hiring in CALES as of July 10th, stopped tenure track faculty hires in progress, and asked units to dramatically slow down spending.  All of these unprecedented actions are intended to preserve jobs and these steps are contributing to significant progress to reduce this deficit.

I do not know what steps the University’s leadership will take to address the shortfall in cash on hand.  While not knowing is potentially scary, each of us has a choice: worry about things we cannot control or take control of what we can and be part of the solution.  I encourage you to share your ideas with your unit leaders or supervisors to reduce costs, improve efficiencies, and increase our mission delivery.  Our combined knowledge, ideas, and innovations are a key ingredient to solving this problem.

ALVSCE – CALES, Cooperative Extension, and the Experiment Station is authentically connected to the communities we live and work in.  We are the embodiment of the ideals of a land grant institution.  Now, more than ever, is the time to lean into this foundational mission.

If you have questions about the finances, your first and best stop is with your unit’s business officer.  Also, your unit leader or supervisor is a great person to speak with.

Thank you for the work you are doing for our communities, students, and one another.

[image0]

Jeff Ratje
Sr. Associate Vice President, Finance Admin Operations
Agriculture, Life and Vet Sciences & Cooperative Extension
(pronounced alv-see…we’re more than CALES)
THE UNIVERSITY OF ARIZONA

Forbes, 314c
PO Box 210036 | Tucson, AZ 85721
Office: 520-621-1468
jmratje at arizona.edu<mailto:jmratje at arizona.edu>
www.compass.arizona.edu<https://www.compass.arizona.edu/>

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